32-year-old macro trader leaves $50m hedge fund job with possible clawback risk
John Curtice, the 32-year-old macro trader who joined hedge fund Millennium earlier this year on a package allegedly worth $50m has left again. Bloomberg reports that his apparently inadvertent exit followed a ‘net low single digit loss,’ and claims that Curtice exceeded guidance on his risk limits. However, Bloomberg also says that Curtice’s trades didn’t hit a limit that would actually trigger a stock loss. Instead, the fund is said to have had multiple ‘discussions’ about risk limits with him before he left.
Get Morning Coffee ☕ in your inbox. Sign up here.
Millennium didn’t respond to a request to comment for this article, and we didn’t approach Curtice for his perspective. His disappearance from Millennium follows an article in the Wall Street Journal last month highlighting Millennium’s strict approach to losses and its ‘unusually tight risk limits.’
The WSJ said Millennium portfolio managers (PMs) managing $1bn in assets can only lose $50m before half their AUM are removed by the fund. If Millennium PMs lose $75m, the WSJ said they will probably be fired.
Curtice was reportedly managing $2bn initially at Millennium, which was cut to $1.5bn as he fell out favour. If the WSJ is right, this would imply that he should have been able to lose $100m, or 5% of his initial assets. Bloomberg implies this wasn't the case.
Curtice’s ejection may dissuade other macro managers from joining Millennium. Macro can be a volatile asset class, as evinced by the wildly divergent annual returns at Rokos Capital Management. Macro portfolio managers who want the freedom to make long term bets can find it difficult to operate within the tight risk limits imposed by multistrategy funds like Millennium. As one portfolio manager told us earlier this year, "The amount that you're allowed to lose is usually very, very limited, and so your time horizon for trades needs to be short."
Curtice himself appears to have fared better at former employers. Before joining Millennium, he spent five years at ExodusPoint, the rival multistrategy fund founded by ex-Millennium executives Michael Gelband and Hyung Lee. Curtice left ExodusPoint in February 2023 and spent around a year out of the market on a non-compete before his short-lived Millennium stint. Part of his alleged $50m package will have compensated for that and for the money he left at ExodusPoint.
It's not clear whether Millennium will claw back its alleged $50m now that Curtice is leaving again. The fund's regulatory filings state both that there is "generally no clawback" for past losses and that Millennium may sometimes pay guaranteed bonuses to replace compensation forfeited at a previous employer. This suggests that Curtice might get to keep his sum, although some former Millennium PMs say this isn't the case and that clawbacks are common.
Despite Millennium's reputation for abruptly letting PMs go, headhunters say it's one of the better funds to work for. "Millennium have some of the best processes for understanding how PMs make money and for supporting them in that," says one headhunter. "Other shops will force PMs to cut risk and stop them out before they've even breached their risk limits." Portfolio managers cut from Walleye, for example, claim they were performing well and were suddenly cut as the fund changed they way it allocated funds between strategies, although the fund disputes this.
One macro portfolio manager who's done stints at major multistrategy funds, says they're all a nightmare to work for. "These funds work only for the general partners. They are bad news for limited partners and portfolio managers, but everyone is seduced by high payouts and an illusion of alpha," he informs us.
Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, WhatsApp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)
